Trade Ripple Online | FXTRADING.com - International

Trade Ripple Online

Trade Ripple CFDs via an Australian Regulated Broker

Ditch the digital wallet and speculate on cryptocurrencies like our Ripple XRP CFD. Trade via a trusted and regulated broker based in Sydney, Australia, with fast execution, no dealing desk and an environment catered for HFT’s and scalpers. 

A Primer on Ripple and XRP

Whilst Ripple and XRP are frequently used interchangeably to describe the digital currency, Ripple is actually behind the protocol on which their cryptocurrency “XRP” runs on.

The main aim of Ripple was to produce faster and cheaper transactions using blockchain technology and provide an open source system to large institutions.

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Ripple
Ripple Labs Inc is a privately owned software company which launched its first open-source protocol in 2012. Originally founded as OpenCoin, the company later changed their name to Ripple Labs in 2015.

Aimed at institutions, banks and cryptocurrency exchanges, Ripple offers a real-time gross settlement system. Having attracted over 100 banks by 2018, Ripple is considered to be the most successful of the blockchain backed technologies in garnering institutional interest.

Part of their suite of payment solutions is RCL (Ripple Consensus Ledger) and RippleNet. RCL supports the transfer of digital tokens which include cryptocurrency, fiat or any other unit of value, and it allows banks and institutions to incorporate it within their systems without permission from Ripple, as it is all open source.

XRP
XRP is Ripple’s native token which uses RCL to transfer units of value across RippleNet. At its inception there were 100 billion XRP units created, 60% of which is owned by Ripple. According to its protocol, the XRP supply will remain fixed at 100 billion units, which makes it similar to Bitcoin’s circulation being capped at 21 million units.

However, the large company ownership by Ripple has come under scrutiny as it is argued it’s not a truly decentralised crypto such as Bitcoin, as it is essentially privately owned.

As of November 2020, XRP had a market cap of around US $26 billion, making it the third largest cryptocurrency in the world behind Ether ($59 billion) and Bitcoin ($322 billion).

XRP was designed as an upgrade to Bitcoin by being faster with lower transaction costs. In comparison, a transaction on a Bitcoin exchange can take up to one minute whilst a transaction with XRP can be as little as four seconds. Moreover, XRP can process up to 1,500 transactions per second.

Ripple Futures:
With the release of Ripple (XRP) futures on exchanges, fund managers, institutions and banks were finally able to speculate on the direction in bullish and bearish markets. And with the ability so short, they could effectively hedge their exposure to the cryptocurrency itself and layer together complex strategies usually associated with hedge funds.

Whilst futures trading is usually out of reach for the typical retail trader, their existence has helped pave the way for a Ripple CFD (contract for difference) which is a more affordable form of cryptocurrency derivative.

How Does Trading Ripple CFD’s Work?

A CFD (contract for difference) is a derivative of an underlying market. Because it is a derivative, the trader does not own the underlying market yet can still speculate both long (bullish) and short (bearish) moves to try capture rising and falling price fluctuations. This means that when a Ripple CFD position is opened the trader is not actually buying or selling the actual cryptocurrency itself, yet they can enter long and short positions of that market.

Furthermore, as our Ripple CFD is traded on margin then only a fraction of the underling amount of Ripple is required to open the trade. This makes Ripple CFDs more affordable to trade than the cryptocurrency itself as Ripple is not a leveraged market.

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Long example: Ripple (XRPUSD)
A trader buys 50 contracts XRPUSD (50 XRP tokens) at USD $0.5400

  • If the price rises to $0.6200 the trader could exit for a profit around $4,000
    • (# contracts x contract size) x (exit price – entry)
    • (50 x 1000) x ($0.5400 – $0.6200)
  • If the price falls to $0.4895 the trader could exit for a loss around -$2,525
    • (# contracts x contract size) x (exit price – entry)
    • (50 x 1000) x ($0.4895 – $0.5400)
  • A 20% margin requirement with 5:1 leverage requires $5,400 of capital
    • (# contracts x contract size x price) / leverage
    • (50 x 1000 x $0.5400) / 5

 

Short example: Ripple (XRPUSD)
A trader sells 20 contracts of XRPUSD (30 XRP tokens) at USD $0.4200

  • If prices fall to $0.3100 the trader could exit for a profit around $2,200
    • (# contracts x contract size) x (entry price – exit price)
    • (20 x 1,000) x ($0.4200 – $0.3100)
  • If the price rises to $0.4820 the trader could exit for a loss around -$1,240
    • (# contracts x contract size) x (entry price – exit price)
    • (20 x 1,000) x ($0.4200 – $0.4820)
  • A 20% margin requirement with 5:1 leverage requires $1,680 of capital to open the trade
    • (# contracts x contract size x price) / leverage
    • (20 x 1,000 x $0.480) / 5

 

Costs Associated with Trading Ripple CFDs

Spread:
For each market within the MT4 platform there will be a bid and ask price. The difference between the ask and the bid is called the spread, and it is a nominal fee charged to a trader at the point of trade entry.

As the spread is a variable rate its width can fluctuates throughout the trading day, and its width (cost) varies depending upon available liquidity and trading volume. Usually we would expect spreads to be thinner during higher periods of trading activity such as when European and US traders are active. It is also typical to see spreads widen during les active periods of trading activity such as Asian session and public holidays.

The spread can be seen within MT4 on a deal ticket and the market watch window.

In this example, the spread is $5.00 USD ($0.56750 – $0.56250) if one XRPUSD contract is purchased

Ripple (XRPUSD)
Bid / Ask:
Spread = Ask – bid x1000
Spread = (0.56750 – 0.56250) x 1,000 = 5

In the next example, the spread is $3.00

Ripple (XRPUSD)
Bid / Ask:
Spread = Ask – bid x1000
Spread = (0.32850 – 0.32550) x 1,000 = 3

Swap:
At midnight server time, an open position may incur a rolling swap charge. It can be either a debit or a credit to the open position depending on whether the trader is long or short the market and what the lending rates are between the underlying crypto exchange and daily swap costs for the US dollar.

As swaps rates are calculated 365 per year, Friday is a “triple swap” day which means the credit or debit will be charged for three days to account for the weekend.

To view swap rates in MT4, right click over a market in the “Market Watch” window and select “Specification” from the dropdown menu.

Advantages of Trading Ripple CFDs

  • Trade Ripple alongside legacy markets
  • Trade long and short
  • Trade Ripple on margin
  • Trade bitcoin with speculative tools
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Trade Ripple alongside legacy markets
There’s no longer the need to trade via a crypto exchange or go through the hassle of opening a digital wallet with our crypto CFDs. Trade Ripple CFDs alongside legacy markets such as forex, commodities and indices.

Trade Long and Short
The ability to trade both long and short is not a feature always available on crypto exchanges. Thanks to our Ripple CFD our traders can speculate in both bullish and bearish markets.

Trade Ripple on Margin
Margin allows a trader to speculate on a given market at the fraction of the cost of the underlying market.

Trade Ripple with speculative tools
Our MT4 platform is built for traders, not for processing payments. So our traders enjoy the same full features a speculative trader requires on Ripple and other cryptocurrencies.

Why Trade Ripple CFDs with FXTRADING.com?

  • Trade with a regulated broker
  • No dealing desk intervention
  • Lightening quick trade execution
  • Multiple deposit options
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Trade with a Regulated Broker
Not all brokers or cryptocurrency exchanges are regulated. But if you trade with FXTRADING.com you can rest assured we are regulated by ASIC (Australian Securities and Investments Commission).

No Dealing Desk Intervention
Our traders can remain assured that no dealing desk will intervene with their trades, because FXTRADING.com don’t have one.

Lightening Quick Trade Execution
Take advantage of our fast trade execution, catered to HFT (high frequency traders) and scalpers.

Multiple Deposit Options
Our traders can open and fund in multiple currencies via several popular methods such as Skrill, Neteller, POli, international bank wire and local bank transfer.

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